Strategy development in small hospitals: stakeholder management in constrained circumstances

Small hospitals form a vital part of the health care safety net, serving communities that would often otherwise lack acute care. It is, therefore, important to understand how strategies unfold in these organizations. We used semistructured interviews to ask chief executive officers (CEOs) of seven small hospitals in Pennsylvania how they viewed their competitive environments and how their strategies evolved. Systematic semi-inductive analyses of these data reveal two major themes. First, CEOs of small hospitals perceive highly dynamic and hostile environments but do not stress complexity. Second, continual negotiations with key stakeholders facilitate the translation of CEOs' insights into organizational strategies.